Market News

Financial Market Downturn Spreads to Oil

Markets took a nosedive yesterday in conjunction with other financial markets, crashing to a closing price just above $73, and the losses continued overnight. Crude oil is currently trading at $71.34, a loss of $1.83 since yesterday’s close.

Fuel prices are also heading far lower as well, as financial markets turn down. Diesel prices are at $2.3447, having given up 5 cents this morning. Gasoline prices are trading at $1.9522, down 6.8 cents.

Oil markets are reacting to strong selling pressure across global equity markets – Wall Street had its worst day in eight months. The chart below shows the Dow Jones Industrial Average’s performance yesterday, which after the sell-off fell to its lowest point since August. Markets fear there could be more losses to come, given concerns over growth in emerging economies.

EIA Data

The API released their weekly inventory data yesterday, a day delayed, and this morning the EIA produced their own inventory data. The API showed a huge build in crude stocks, and the EIA’s numbers, although smaller, were still quite large. Overall, the report gave traders further bearish news to add on to the overall bearishness in financial markets.

Storm Update

Tropical Storm Michael made landfall yesterday with sustained winds of 155 mph – just shy of Category 5 status, making it the strongest hurricane ever to hit the Florida panhandle. Currently, over 700,000 homes and businesses are estimated to be without power. The storm is now traveling over South Carolina, and is expected to continue moving out over the Atlantic in the coming days.

Locally, terminal operators and carriers are assessing damages to see how quickly normal operations can resume. Although the storm was incredibly powerful, its fast-moving pace will hopefully result in minimal long-term damage for areas. While the storm did shut-in 40% of Gulf Coast oil production, 670 kbpd, the long-term impacts to crude output should be low.

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